Today, college education is nearly always costly. Statistics show that costs have risen faster than the rate of inflation over the last 3 years. Going to college can often be a matter of privilege for those on low incomes who can just about feed their families. However, there may be a way out for people who want to gain a university degree without gaining massive debt in the process – a 529 Account for college savings. Tax-Free Earnings and Distributions: All earnings in a 529 plan are tax-free. Distributions are free from all federal income and most state income taxes when used for tuition or other qualified college expenses. This makes 529 plans as powerful as Roth IRAs for long-term savings.